Currently, labor law recognizes workers providing services can be categorized as an independent contractor or an employee. Independent contractors and employees are differentiated by their degree of control and independence in their work, and laws generally provide employees with more employment rights.
Uber classifies their drivers as independent contractors, evading expenses such as overtime pay, minimum-wage protections, unionization, and unemployment insurance.
For Uber drivers this differentiation has been troublesome. Uber drivers have brought multiple class action suits against Uber for complaints such as: misclassifications as independent contractors, violations of tips law, tortious interference with advantageous relations, unjust enrichment/quantum meruits, breach of contract, violation of the minimum wage law, and violations of overtime law.
A notable suit disputing the employees versus contractors issue is O’Connor v. Uber Techs., Inc. In December 2015, the case was certified as a class action, including all drivers who have contracted with Uber directly. Plaintiffs in the suit allege that they are Uber’s employees, and are therefore eligible for protections codified for employees in the California Labor Code. Trial for O’Connor v. Uber Techs., Inc. is set to begin on June 20, 2016.
In his article, Alan Pyke acknowledges that apps like Uber exemplify situations in which current laws don’t work for the industrial age. He cites a paper written by economists Alan Krueger and Seth Harris, proposing a third category of employment: the independent worker. Independent workers would get no overtime, unemployment insurance, or minimum-wage protections, and would only have a limited ability to organize and bargain collectively. Nevertheless, independent workers would have more employment rights than that of independent contractors.
While multiple factors regarding a worker’s job description and contract are weighed to determine a worker’s degree of control and independence in their work, labor law still regulates workers as if they were dichotomy of contractor or employee. This dichotomy is not representative of reality. Integrating a third category in-between contractor and employee would equip workers who have more employer-controlled environments more rights and protections. Such environments are becoming increasing common, especially with the development of apps like Uber and Lyft, where it is possible to work in a very employer-controlled environment without ever meeting one’s employer.